Dubai: The ADNOC joint venture Borouge is all set to create one of the world's biggest petrochemicals entities.

Borouge and Austria's Borealis will form Borouge Group International. Not just that, it will acquire Nova Chemicals for $13.4 billion, in turn establishing the 'world’s fourth-largest polyolefins player'.

The new company will also go in for a listing on ADX (Abu Dhabi Securities Exchange).

It will offer 6.12% of its equity as a free float. This is subject to regulator approval and assuming all existing Borouge free float shareholders accept to exchange their existing shares in Borouge into shares in Borouge Group International.

Borealis itself is part of OMV, the Vienna headquartered energy and chemicals company. OMV owns 75% in Borealis, while ADNOC has 25%.

Borouge went through a hugely successful IPO in June 2022.

The dividend policy will see a 'minimum payout' of 16.2 fils per share, representing a 'minimum uplift' of 2% compared to Borouge’s targeted full year 2024 dividend per share. (Borouge shareholders get 7.94 fils a share for 2024, with the next payout coming in April.)

Borouge Group International will be headquartered in Vienna with regional headquarters in Abu Dhabi.

It will also follow Borouge's footsteps in listing on the ADX.

ADNOC and OMV had been in talks for a while over building on what's already been achieved through Borouge.

ADNOC will have 46.94% in the new holding company, and OMV having the same. The latter will put in 1.6 billion euros into the consolidated entity to equalize shareholding.

The 'new industry powerhouse will have best-in-class margin profile with around $500 million in expected synergies per year, and deliver immediate dividend accretion as compared to existing Borouge dividend for shareholders', said a statement.

“The combination of Borouge and Borealis and acquisition of Nova Chemicals, further future-proofs ADNOC and solidifies Abu Dhabi’s status as a leader in the chemicals sector,” said Dr. Sultan Al Jaber, ADNOC Managing Director and Group CEO.

Nova Chemicals Corp. is a leading North American based polyethylene producer.

ADNOC has entered into a share purchase agreement (SPA) with Nova Chemicals Holdings, which is an indirectly wholly- owned company of Abu Dhabi's Mubadala, to buy out Nova Chemicals Corp.

The latter has a significant 2.6 million metric tons of polyethylene capacity and 4.2 million mt of ethylene.

Once it is formed, Borouge Group International will acquire Nova for $13.4 billion including debt, and 'further expanding its footprint in North America'.

"The acquisition, together with the recontribution of Borouge-4, would create a new $60+ billion global polyolefins champion, set to be the world’s fourth largest by nameplate production capacity," said the statement.

Key timelines for the Borouge-Borealis deal

The combining of Borouge and Borealis and acquisition of Nova are likely to complete in Q1-2026.

Once this is done, ADNOC’s stake in Borouge Group International will be transferred to XRG. The Abu Dhabi energy giant created XRG to be his investment vehicle in the natural gas, chemicals and low carbon energy solutions.